tv Bloomberg West Bloomberg April 1, 2014 6:00pm-7:01pm EDT
>> live from pier three, welcome to bloomberg west will be cover innovation and the future of business. amazon holds an event in new york city tomorrow making a major announcement about video. we will have a preview. arianna huffington joins us to talk about the future of online media and her sites role within the aol empire. first, the check on the bloomberg top headlines. opening statements on the apple trial. the samsung lawyers told the
jury that apple's lawsuit is really an attack on google's operating system and that apple is using samsung to get a court order blocking android phones. isle's lawyer argues it samsung that makes the samp -- the smartphones. grubhub is raising the price of its upcoming ipo. by threee the price dollars and now expects the price anywhere from $23 to $25 a share. it would be valued at just under $2 billion at the top of the range. cbs as abe a blow for looks to cash in on the upcoming masters tournament. tiger woods has redrawn -- withd rawn. having tiger in contention has routinely boosted ratings. inyears he was a nonfactor 2012, final-round ratings dropped 22%. amazon making a huge push into
the streaming tv world. big announcement in new york tomorrow. we know it will be something about video, we don't know for sure if it will be a box. they denied it was a free streaming service. >> it is interesting how hardware has become an impediment. a lot of interesting players -- netflix is the biggest. >> they don't have a hardware play. >> they have done a lot of partnerships with the set-top box makers and the apple tvs of the world. you have seen amazon struggle more with that and try to get prime placement with their prime video service. of the hardware makers have been made that deal. it looks like amazon is trying to make some moves to get in there with hardware for the benefit of their software. >> amazon greenlighted six new series for their video-on-demand service. for more on what this content
push means, i want to bring in someone who knows what it takes to create original content for online platforms. ofning us now is the ceo guru. jon erlichman also joins us. what are you expecting amazon to announce tomorrow? is there going to be hardware? or streaming component? >> there has been talk about hardware. in the lead up to that event, they have had a couple of content announcements. you highlighted the word about their original series in which ones will continue on. one example being a show that stars of john goodman. today, they made this announcement tighten licensing content. people who use it will be able to watch past seasons of 24 and fox is bringing back another version of 24. you can stream that on amazon later. at least on the video content strategy side, there are three
parts. they want people to use that service so they will buy movies and buy tv shows the same way they do on itunes. if you want scale in this business, if you want to make with you got a destination, you have to have original shows. they have cut a lot of licensing deals like this one with fox and or nickelodeon where they got shows like dora the explorer. you need to pay money for it. >> speaking of those original shows, not a lot of people can name a single amazon produced to show. been, why hasn't amazon able to make the hits that netflix has with house of cards? >> i think amazon has come out incredibly strong with their first wave of shows. netflix has been in the video streaming business for several years. amazon is just really jump into it so i think we are going to
see some of the shows really start to pop. it is a strong first showing. >> what do we know about what the effects have been on the cost or the value of the kinds of shows you are making? issee netflix say there rising content cost because of the competition. >> we are seeing netflix and amazon spending not what traditionally we see digital company spend but what cable companies are spending. they are spending premium cable dollars for their programming. that is one of the reasons why the quality is so high. result, another set of competitors on the buyer side and that could drive content costs up. >> what is the hardware side of the business? if amazon does come out with a set top box, they will be competing with apple tv, with google's comcast -- chromecast. talk about the landscape.
>> you have to bee frienemies. i watched the amazon videos and use their service so they have to maintain that relationship. a lot of people have wondered if you do see a box, will netflix be available on it? isit wasn't, and -- netflix one of the most stream services out there so i think amazon has to realize that you can have a box and a business tied to that and you could also build out your streaming service which i think they have been doing for a few reasons. it helps their prime offering which obviously allows -- you get the free shipping. is people are buying fewer dvds these days. from amazon side, if you can get a robust service like the video service they have been building, maybe that is a way to save a beeness that arguably has in decline because people don't necessarily go to amazon.com to buy as many dvds.
they are more likely to get downloads. >> larry, you talk about a higher for the kind of amazon products or cable like products. is that about production value and therefore more likely to have an economic impact on the unions in l.a. and whatever it takes? >> it is about production value and the talent. that stars john goodman, he is a movie star people know him. a production to that scale is comparable to any show you would see on hbo or fx. there is a lot of runaway production from a lay, but there are also a lot of buyers making premium programming. it kind of balances out. >> aside from john goodman, in terms of production talent, who stands out most to you? who do they have on board that makes you confident that there
shows can be it's even though they haven't really been hits yet? >> their creative team has come out very strong. they will have, not counting will havery, they five adult series going this year if you include the four new ones. that is comparable to a recent size -- reasonably sized cable network. a little over one year, they have mounted five long-term series with the quality of which is strong. don't forget about the candle -0- kindle. we are talking about a streaming device but there is one product that is on the front page of amazon.com every day and that is the kindle. when you put millions of these tablets in peoples hands, the ability to give them some original programming in conjunction with a prime subscription is a very powerful tool in amazon's arsenal. i think just the ability to offer exclusive content on the
kindle is a big selling point. >> thank you so much, larry. jon erlichman, thank you. tomorrow, we have cris carter, the creator of the x-files. he is also creating an original program for amazon. you will be with us on a special edition of bloomberg west. that is 1 p.m. eastern, 10 a.m. pacific tomorrow. is april fools' day, so what tricks do some companies have up their sleeves? china to get too distracted by all the april fools' day jokes. >> yet the read more carefully today. >> that is coming up. ♪
uber announced its latest product which is launching with the help of a footwear company. they say the most innovative product yet. the car made of cardboard uses no gas in is also a great -- >> that is great. it is like fred flintstone but lighter. >> wouldn't that be great, if her were true? they are on inventing the wheel. nowou were saying that until facebook buys it for $2 million -- $2 billion. announcingbranson that we are all going to have climate onrsonal their plane. >> i would sign up for this. >> you can create a tropical climate.
you can create at chicago climate. onen virgin, if you get million miles, you can go to his island but now you can just inject -- >> it is amazing people have the time doing these things. we are talking about it so i guess that's what they want. speaking of the story that is not a joke, tomorrow microsoft is kicking off its conference here at san francisco. you were at the announcement last week. what should we be watching for? there are are announcement that are suspected to come tomorrow and what they will focus on tomorrow is possibly a new phone. really trying to keep their argument that the microsoft phone will be a central computing in the future.
>> i saw one headline about your book is less leaning more sleeping. also playing off of cheryl sandberg spoke only man. is that a fair way? wonderfulhas been a influence. i think leaning is really about me dealing with our own inner doubts. daring to dream big. completely consistent with what i'm saying which is why we need to lean back. we need to recharge ourselves and be more creative.
but added premium is creativity. out, we're burnt we goodyeare in more subtle things. >> when it comes to continuing to build the huffington post, what you want to do there and how do you plan to confuse the things you learned in this latest stage of your life? >> definitely making the changes that i started describing in joe, and meditation and breathing classes. now 95 million that we are right now 95 ,i
million around the world. we have thriving coverages in each country. wherelooking at this and the new ways of doing things in each country are. >> going viral does not mean mission accomplished. is that not the ultimate measure of success? value is not just how important it is and how you obtain that. .o i think it is very important carefullylook at more at everything and why it is going viral. >> we heard her take on steve jobs and sheryl sandberg, but what about her sale to aol and the work usually ship? we will have more with her next.
>> you're watching bloomberg west where we focus on innovation and the future of business. arianna huffington sold the huffington post to aol for $350 million just three years ago. --t is it consult right now what is your relationship like now? and what does you think of companies like for the -- up worthy? >> it shows how media has changed. when i was young, before you wereborn, the headlines
supposed to be the ones that construction, the tagline which was all bleak. isthe huffington post, it generosity, compassion, ingenuity, and the stories that people want to share. that is a very different environment. think of them as competition, on the good or bad for the media business? >> i do not think about the media entities as competition. i like to run my life and my business. i don't try to dance better than anyone provide i try to do better than myself and >> by 2017 the media business will
either double or shrink. and of contents i can come out of nowhere. what do you think of that? >> is a very different environment. it is very hard at the moment to create a destination site. it comes to sharing. the huffington post was the last major destinations site's 2005. least, our homepages very well trafficked. >> now that aol is overwhelming and is missed to more of an ad services business and not so much a content is the good what does that mean for the huffington post? how much will you will continue to support them? in the huffington post being
acquired as been great for both. we are able to expand internationally, and launch a streaming network, how close life, launched many new sections around the issues of how we live our best lives, and we can grow because we have innovative media and the company has been a leader. and in creating, we're launching dedicated sections that put the white line on good things -- spotlight on good things. curious, in this stage in which your thriving, how you view selling the huffington post to aol three years later.
how do you feel about that decision, and what is the state of your relationship with tim armstrong? >> fantastic. i'm glad that i made that decision. it would not be anywhere where it is now. ,verything is moving so fast and you to be able to innovate, to grow, and to be ahead of the pack, and we are able to do that. picture ofthe arianna and arianna huffington, and huffington post? what is next? >> >> we are going to continue growing internationally. we have plans to launch in india. time as the world is looking to redefine success and what a successful life is and how we thrive.
amazingrage has been with multiple sections on , things thatvorce our readers and viewers love. traffic thant more our politics and news sections. >> arianna huffington, cofounder of "the huffington post". on her book tour. country's how is the second largest school district giving each of its students and ipad? take a look at the $1 billion plan next. and you can watch us streaming on your phone, your tablet, or bloomberg.com.
how do you take the country's second largest school district and bring it into the digital age? it is all about the tablet. last summer, l.a. started to provide every student with a tablet. but there are some headaches. willow bay goes inside the city's new, high-tech classrooms to find out how the tablets are changing the way kids learn. >> i am excited to be here with you. have you received your ipaq? >> yes! >> it is a bold, billion-dollar initiative. every public school student in los angeles gets and ipad. >> we wanted them to have technology that was modern. we want the fundamental right for every student to have that. pearsonis designed by and align with common course standards.
before the kids got their hands on the tablets, teachers got a look through a series of training sessions. >> any questions? >> in september, the ipad rollout began in 47 schools. >> we are going to learn. >> we are going to learn how to do math. we are going to learn how to write our names. >> can you put the ipad in your backpacks? >> no! desk? doy go on your they go on the floor? can you spit on them? >> no! follow theergartners rules. the older students got creative greed within a week, 300 high schoolers reconfigured the devices. >> they wanted to personalize the device so they can have their youtube and facebook. those are things that we are not currently permitting. >> students can no longer take a
tablet home, a quick fix for one of several hurdles plaguing the rollout. still, the superintendent insists these are manageable bumps in a high-stakes transition. >> we needed an alternative to books and paper. , they are static. the notions of students being able to have current content is what they will face when they go to university and college. >> this year, another step forward. ipads for 38 more schools. when the plan is completed, l.a. ausd will be the largest district in the country to equip students with and ipad. >> that was willow bay. interesting to see that plan and how it is rolling out. technology is not just helping schools. it is also taking up adult education. >> we have seen this in a lot of different arenas. all of the different companies trying to find different ways to
find targeted education, not just this traditional method. helping people figure out how to careers and modern the changing economy. >> people who are in high-tech 17%-20% more than other employees. there is a financial incentive comingire these skills, from the bay area economic institute. i want to bring in the ceo of a company called treehouse, which teaches anyone how to design websites or mobile apps. your nest now via skype. talk to us about your business. you started out focusing more on schools and students. now you are focusing on businesses and adults. >> we have almost 70,000 students right now. , folks them are adults that are electricians or plumbers or baristas learning
how to code and making good money on the side. >> in terms of the business model, do you guys get to a point where the financing is better? or is that only for accredited programs? >> we only charge $25 a month. we try to completely go around any government funding at all. we would like this to be less than cable for people every month. >> talk to us about some of the companies you are working with now. you work with twitter, airbnb. what do those companies get? >> a lot people need to cross train. they are hired as a designer or developer and they need to add another skill set to their repertoire. treehouse is a great way to do that. you do not have to go to a physical conference or a workshop. you can learn over lunch or at
to the model of coming out of high school and choosing a trade , going to school for that trade. if you can afford university, that is great. i do not think that should be the default status for people in the future. >> talk about some of your success stories. have you seen people change jobs because of the skill that you are helping them learn? >> yes. it is amazing. i feel so honored and proud to be a part of all of this change. we have a student named russell who was an electrician. he started having trouble paying his mortgage and feeding his family during the great recession. he discovered treehouse and it took him about six months to makesthe skills. now he websites on the side and he can pay his mortgage. that is an amazing example of someone who is retraining and doing it on the side. then we have people who completely changed careers. you have people doing administrative work or even factory work who are now web
designers and web developers. it is amazing. i think that is what is so powerful about the times that we live in. you do not need a very expensive, high level education to do this. anyone who is driven and intelligent can do this. it is very exciting. >> one of the things i love about your service is that for every gold subscriber you get, you donate an account to a public school student. tell us about that. >> i have been a big fan of toms, the shoes. i used to buy them because i knew someone would get a free pair of shoes. it just hit us one day, we can do that for education. why don't we help fund accounts for schools by doing the buy one ?et one model it is fun. i am thankful that we can do that. >> i look at the cost that you guys charge for students and the prices that some of the online, for-profit companies charge for
an education and we are off by a factor of three decimal points. what is it about those traditionals offering online education that makes it so expensive? is that a ripoff? >> i think it is a ripoff. they are preying upon people's believe that accreditation really matters. when you are looking at an online degree, it does not cost the university what it costs to deliver that degree in person. it just does not. if you are looking at getting an online computer science degree for about $50,000, it is almost insanity. we can make someone job-ready at treehouse in about 6-8 months for $25 per month. you can do it with kids, with a job. we believe there is a fundamental disruption happening to the educational model.
frankly, the traditional universities are scared to death because they know that this is changing. it is better for all of us on the receiving side of this, that it is possible to get an education now. scary time for traditional universities. >> education does not stop when you leave college. thank you so much for staring -- for sharing your story with us. mobile, and crowd funded. we will be uncorking some innovative wine tech next on "bloomberg west". ♪
>> an interesting business model. making great wine more accessible through crowd funding. ckstarter,her -- ki ofy sold 10 million bottles wine last year. >> is that a lot? >> it is more than one dollar per bottle. talk to us about this business model. >> we are crowd funding winemaking. americans pay about twice as much for their wine as europeans. the winemakers are giving us a tough deal. heardave always winemaking is a hobby for rich people and it is not profitable. >> that is true. is, "the way to make a small fortune is to start with a large one." thatwas going to make joke. your business has some serious numbers behind it. .ou have members that pay up
do they subscribe to a goticular winery or do they across -- >> we have 200,000 around the world who put up about $18 per year. the numbers make about 10 million bottles. the business is only five years old. it is growing rapidly. >> for the independent winemaker, how profitable can this be? >> most of them are barely making money at all. they get to make some proper money this way. the flipside is that they can spend 52 weeks of a year making wine. right now, you spend 17 weeks, which is a bum deal. >> talk about the process of getting it to customers. how is it different than a wine club? >> it is exactly the same in that, in the end, fedex comes and drops it off.
>> there is also the aspect of marketing. that is a substantial cost in america that is widely understood. buy on amake a $100 bottle of wine, the cost to make it is not that great. has about $10le in the cabinet. it has $90 of stuff you cannot taste. are crowd funding that wine, you do not have to pay that $90. it is a similar principle to education. it does not cost anything like the kind of fees that are being charged. you look at these marketing costs, why is europe so different? we have seen european winemakers come in. that was certainly a marketing effort. why is the cost of yours so great?
>> because the laws in america are written to protect the distributor. important people, the winemaker and the wine drinker, are being screwed. the people making art -- all the money are the guys in the middle , who could be left out of the loop if not for the law. founder and ceo. stay with us, because it is time for the byte, where we focus on one number that tells us a whole lot. i am guessing we will talk about wine today. >> 4,230,000 tons. those were the preliminary figures last year. it is up five percent from the previous year. >> so we are drinking more. >> why don't we help that problem right now, since it is happy hour. >> not for you, john. it is not happy hour in l.a. >> john might be fine.
have you tried this chardonnay? how is it, john? >> ok, great. hoda and kathie lee can do it, so can we. >> through the power of virtual reality technology, i can drink with you. >> tell us about this wine. calleds made by a guy scott peterson, which is the one made for kendall jackson. >> it tastes a lot like handle jackson. dall jackson. >> have you discovered new wine that you have not had before? >> absolutely. there are so many talented winemakers. doesof them, their product not get to market. that is why we are here. >> thank you so much for bringing happy hour to us. 11:00 a.m. in the morning. john, cheers. thank you all for watching.
mone whereto "lunch we typey" together the best interviews in business news. general motors announces yet another recall. bumpys creating one very first quarter. and april full -- fools. remember greece? it is on the path to recovery sort of. this is part of our weeklong series here. billionports the $2.5 empire. we will hear frora